Solar Energy Gets Cheap in Coal Country

Georgia Power, the Atlanta-based subsidiary of energy giant Southern Company, just issued a Request for Proposals for solar, and there are a couple of remarkable things about it.

Georgia Tech solar panels with Atlanta in Background

First, it’s big — at 495 MW, this “Advanced Solar Initiative – Prime” offering should raise eyebrows of developers and investors from Silicon Valley to Wall Street. In 2011, Georgia had 8 MW of solar. This RFP will put it on track for ~800 MW by 2016. One hundred times more solar in five years is downright impressive.

Second, all this solar is being done below Georgia Power’s avoided cost. Yes, that’s right, cheaper than the fossil/nuke alternatives. From the RFP:

“Acceptable bids for the ASI-Prime must not exceed Georgia Power’s projected levelized avoided cost for the term of the power purchase agreement….The Company received a robust response to the 2013 ASI solicitation, which included multiple bids priced significantly under the established not-to-exceed price cap of $120/MWh and the Company has the continued expectation that it will receive highly competitive bids from the market. The Company is confident that sufficient bids will be received to fulfill the ASI-Prime portfolio with very competitively priced utility scale projects that will not exceed the Company’s levelized avoided cost.”

From Attachment G of the RFP:

Georgia chart illustrating avoided costs for levelized terms

Take a moment to let this sink in. We are not talking about California, where political support for renewables runs high, and much of the solar investment is already being done lower than the cost of building new gas power plants. Nor sunny Texas, where Austin Energy went out with a RFP for 50 MW of solar and got bids so far below the cost of new natural gas or coal that they tripled their order, to 150 MW for a reported ~5 cents/kWh.

This is Georgia Power, owner of some of the largest coal plants in the country and one of the few utilities actively building new nuclear power plants. When a hippie-free zone like Georgia goes big on solar, you know that solar’s gone mainstream.